Bank of America Shifts Chief Auditor to Oversee Home-Loan Risk
Bank of America Corp. assigned Paul Morrison, the firm’s general corporate auditor for the last decade, to oversee risk at its home-loan unit amid foreclosure probes and mounting demands to buy back mortgages.
Morrison, 55, was named risk officer at Bank of America Home Loans and Insurance, succeeding Steve Troutner, who became credit, product and pricing executive for home lending, according to an internal Oct. 27 memo obtained by Bloomberg News. Christine Katziff, 45, is acting general corporate auditor and reports to the board of directors’ audit committee.
The loan and insurance unit reported a pretax loss of $6.25 billion in the year’s first nine months as Fannie Mae, Freddie Mac and other investors push the company to repurchase almost $13 billion in loans. Chief Executive Officer Brian T. Moynihan, 51, pledged Oct. 19 to dispute any unjustified demands to buy back defective mortgages and said many claims aren’t warranted.
“We are aligning talent and resources to address one of our most critical business issues,” Bruce Thompson, the bank’s chief risk officer, said in the memo, which was confirmed by Dan Frahm, a bank spokesman. “Throughout Paul’s tenure as corporate general auditor, he demonstrated the leadership skills, business acumen and a unique expertise that will make him successful in this important assignment.”
Attorneys general in all 50 states started a probe of foreclosure practices at the largest U.S. lenders after court documents surfaced showing employees signed affidavits without ensuring their accuracy. That prompted Bank of America, JPMorgan Chase & Co. and Ally Financial Inc. to delay some seizures and evictions.
Bank of America acquired Countrywide Financial Corp. in 2008 and is the largest servicer of U.S. home loans and second biggest originator of loans after Wells Fargo & Co. The Charlotte, North Carolina-based company is handling about 1.3 million loans in which payments are at least 60 days late, using a customer-service staff of 18,000 employees that has tripled over the past two years, according to the company.
Morrison joined Bank of America in 1996 after working in senior audit jobs at JPMorgan, Salomon Brothers, Wells Fargo and Advanced Micro Devices Inc., according to a bank announcement when he was promoted to general auditor in 2001.
“He’d be a person who knows the weaknesses in the company’s systems,” said Billy Soo, accounting department chairman at Boston College’s Carroll School of Management. “The general auditor looks at all of the company’s internal systems and inevitably he’ll find some nasty things that need to be cleaned up.”
Katziff worked for FleetBoston Financial Corp. before its acquisition by Bank of America in 2004 and has been audit executive for all the lender’s businesses, Moynihan said in the internal memo.